By Sam Stegeman, CISA Program Coordinator
Published in CISA’s April 2011 Enewsletter.
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“Nobody starts a dairy,” people told Paul Lacinski in 2005, when he and his wife Amy Klippenstein had just bought a small herd of Canadiennes and fixed up a neighbor’s barn to start milking. With dairy farms going out of business and dismal commodity milk prices, many dairy farmers in the Northeast are exploring options for creating more valuable dairy products on their own farms, rather than shipping fluid milk off the farm. Paul and Amy have been able to avoid bulk milk sales altogether, and center their new business on a line of organic yogurts, supplemented by on-farm raw milk sales. “We didn’t have experience with cows,” says Paul, “but we also didn’t have a million and a half dollars in debt,” like many dairy farms. “The big thing is we thought there was a market for local yogurt, and we were right.”
Sidehill Farm includes three businesses– an organic vegetable farm Amy started in 2001, and the recent additions of the dairy and the yogurt plant. Paul runs the yogurt operation out of a rebuilt trailer, and together they share the dairy duties. As the only local yogurt available in western Massachusetts, Sidehill Yogurt has ridden the wave of interest in local food. It’s available at 45 stores and restaurants around the Pioneer Valley, with some deliveries to Boston and the Berkshires. Their raw milk sells at $7 a gallon from a self-serve refrigerator on the farm, totaling 4000 gallons a year.
How do you build a successful diversified small farm from scratch on a low budget in just five years? Two possible keys are Paul and Amy’s commitment to technical efficiency (Paul was a green building professional before he was a dairy farmer) and to cultivating quality relationships with neighbors. Their dairy herd rotates on the pastures of fourteen different neighboring landowners. “That’s a lot of landlords.” says Paul. “Luckily all of them have been really great.”
But the most important neighborly relationship is with Phyllis Kirkpatrick, who Paul and Amy approached with a proposal in 2005. Phyllis was living on a defunct dairy farm just a few hundred yards down the road. “The hayfields were going to hell, and the barn had fallen into disrepair,” says Phyllis. “They made so many improvements. They even let me choose the colors. It feels wonderful that it’s now useful.”
First they rebuilt the milking parlor, built in the 60s with a pit and six stations. The adjacent milk room had been contaminated by chickens, so Paul built a new one in an old bread delivery truck.
As their yogurt plans developed, Paul and Amy realized they wanted to make the yogurt right on the farm, so they approached Phyllis again about installing a processing facility on her property. Their idea was to build the facility out of an old semi trailer, so that they could move the plant if they ever outgrow Phyllis’s farm. They even photoshopped a white box onto a picture of the barnyard to show Phyllis what the 48-foot trailer would look like, since she would be able see it from her house. She agreed to let them do it.
“Phyllis is amazing,” says Paul. “Letting us use everything here—the land, the barns, the milking parlor. Plus she tolerates lots of cars, trucks, & tractors driving by her kitchen window all the time.”
Being able to bottle all of their products in a facility right on the farm is key to their efficiency, says Paul. “I would lose my mind if it wasn’t on the farm—even if it was a 15 minute drive away. Any time something breaks, or if someone takes the day off, I’m right here. I usually go back and forth between home and the plant 4 or 5 times in a day.”
Before starting their yogurt business, Paul and Amy visited nine different on-farm dairy processors around the northeast, including 3 small-scale yogurt makers in New York State. They were primarily mentored by their friends Jack and Anne Lazor at Butterworks Farm in Westfield, VT. The Lazors were so helpful that Paul and Amy don’t plan to ever sell their yogurt in Vermont.
“The first year was insane,” remembers Paul. “We each worked around 100 hours a week.” Now, in 2011, it’s down to a more manageable 70 hours, and they employ a full time yogurt maker, Sean Quinn, who has worked at the Organic Cow of Vermont and Grafton Cheese. They also employ four others part time, and are expecting to hire two more people full time, beginning this summer.
Paul’s background in building efficient green homes came in handy in the retrofitting of the trailer. Almost everything is rebuilt or reused, and each square inch of floor space is accounted for. Yogurt making is an energy-intensive process, requiring high temperatures of 185 degrees and lows of 35 degrees, so a series of pumps, compressors, heat exchangers, and plastic barrels work together to recycle the heat from air and water before it leaves the building.
Another of Paul’s innovations was a homemade yogurt-capping machine. Health regulations state that for Grade A products, containers may be filled by hand, but not capped by hand. And even a simple automated filler/capper can cost as much as $70,000. So Paul built a suction based homespun capper, which the Department of Public Health inspector allowed Sidehill to use for their first few years of operation. “We’ve been lucky,” says Paul, “All our inspectors have been great.”
Paul and Amy may have been lucky, but they have also been smart about navigating the regulations. One of the first things they did when planning the business was call the inspectors. Knowing the regulations and the inspectors became essential to their business planning— for example, knowing that they would eventually need to buy that $70,000 capper/filler. Or knowing at what production volume they will exceed the small-producer exemptions and be required to start attaching nutritional labels and safety seals to their yogurt containers.
Also, because they converted a trailer instead of building new or renovating, Sidehill avoided a number of building-related permits. The only regulations they had to comply with were related to the disposal of wash water.
When they were thinking about entering the yogurt business, Paul and Amy were keenly aware of how little they knew. “We didn’t know how to sell any products other than vegetables,” says Paul. “We were so inexperienced, we were just pulling numbers out of the air.”
They enrolled in a business training course at the Franklin County Community Development Corporation, and figured out how to launch the business without taking on major debt. They settled on a combination of a low interest loan from Paul’s mother with a seven-year (2 5/8% interest) loan from the Farm Services Agency, plus “every drop of our own savings,” to reach the nearly quarter million dollars that have gone into the business over the last five years.
Housing the processing plant in a semi trailer had a second benefit: the entire plant could be resold to another yogurt maker or a cheesemaker, allowing Paul and Amy to recapture 60-70% of their investment.
The business is thriving, and Paul and Amy appear to have successfully made the transition to becoming dairy farmers. What’s next? Paul lists a series of possibilities:
They are considering selling the yogurt processing trailer and building a new and bigger plant, but that would likely require an off-farm location. “Expanding here would require a couple more trailers,” says Paul. “I think that’s not a good idea. The well has limited capacity, and it’s a lot to ask of Phyllis.”
Another idea is bottling pasteurized cream for retail sale alongside their yogurt. However, because cream bottles don’t fit into the yogurt filling/capping machine, they would have to shell out another $50,000 for a second machine.
They also would also like to double their dairy herd, from 15 to 30, to keep up with the growth in their yogurt and milk sales. They are looking for a larger farm to buy, where they could graze this larger herd and also build a new plant.
“One long term goal for both of us,” Paul says with a grin, “is to work a little less.”